General fund expenses are expected to be about $25.8 million in the coming fiscal year.
One of the main reasons for the deficit is that wages and benefits are expected to increase by about 6.7 percent next fiscal year, but corresponding revenues - including property taxes and income the city shares with the county and state - are only expected to increase by 3.7 percent, Zimmerman said.
The elimination of raises and/or cost of living increases to reduce the anticipated deficit were among the options discussed Friday.
The city saved about $287,000 this year by eliminating employees' annual cost of living increases, Zimmerman said.
According to projections for the next fiscal year, the city could save about $393,000 if the 2.5 percent cost of living increases are cut, City Finance Director Al Martin said Friday.
Eliminating raises, or "step increases," was also discussed Friday. Union contracts make that cut unlikely, Martin said.
The entire $1.2 million projected deficit could be offset with a 9.1 percent tax increase, Martin said. The mayor and council didn't further discuss the possibility of a property tax increase.
Mayor William M. Breichner and Councilman Lewis C. Metzner have said a tax increase - but not how much of one - probably will be needed to balance the budget.
Also, Metzner said, the city should see if the federal government will help pay for two new firefighters.
Councilman Kristin Aleshire suggested increasing such development-related fees as building permit costs. Such a move might shave about $100,000 from the projected deficit, Zimmerman said.
Money collected from speeding tickets in Hagerstown could also benefit the city's coffers if council members made speeding in city limits a municipal infraction rather than a state offense, Breichner said. The state now collects money from speeding tickets issued by Hagerstown police officers.
"I think we should look into that," Breichner said. "The state is not going to give us anything and our guys do the work."
The city could bring in more property taxes by aggressively marketing Hagerstown as an attractive venue for homeowners, and annexing more surrounding land, Councilman Linn Hendershot and others said.
No decisions were made Friday.
Zimmerman will present a proposed budget to the mayor and council by the end of March. They will then review it, make any changes and adopt a balanced budget for the next fiscal year by the end of May.
